Minimum Distribution From Ira
April 11th, 2009
Question: Can multiple beneficiary’s avoid paying income tax when inheriting a traditional IRA from a relative?
By this I mean can they take distributions over a period of years to lower the tax bite. In this case there are five beneficiaries with the following percentages. 34%- 33%- 11%- 11%- and 11%. I know your spouse can do this but don’t know about this situation with two children and three grandchildren. I am hoping they can take minimum distributions over their lifetime.
Answer: The best information you can get on this is from the bank where the IRA was set up. The reason I say that is because there are certain little “quirks” from bank to bank, and they all have a lot of lattitude in how they handle beneficiary distributions.
In my own case, my brother and I can do either lump sum or take distributions, and there is some break on the taxes, too. I just don’t remember what it is, at the moment.
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